Fitness First to shed 24 Australian clubs

Global health club giant Fitness First is to sell a quarter of its Australian clubs, in a dramatic move to reduce $890 million of debt from its UK parent company.

Fitness First Australia, a division of the UK-based Fitness First Group, has been hit by weak consumer spending and competition from 24/7 and low cost fitness clubs in the UK and Australia.

In an announcement today, the company said it was hopeful the sale of 24 of its 97 clubs across the country would alleviate its financial burden.

Fitness First Australia Managing Director Pete Manuel stated "the previous group debt burden ($890 million) will be virtually removed and the business will have significant financial firepower going forward to improve the quality of existing clubs and develop new ones."

Fitness First is the largest privately owned health club group in the world with over 540 Fitness First clubs worldwide reaching over 1.7 million members in 21 countries.

With rising debt, plans for a sharemarket float of the international parent company were mooted, then shelved in 2011.

In early May the international group appointed Andy Cosslett as its new Chief Executive - its second such appointment in 2012 - replacing former Chief Executive Chris Stone who only took the job in February.

Stone has led the financial restructuring of the company, the result of a downturn in company performance.

Fitness First's Australian membership fell by 16,000 people, or almost 5%, to 332,000 members in the year to October 2010, while net profit fell by a third to $28.5 million.

Manuel, who joined Fitness First Australia in April 2011, concluded "we have identified 24 clubs that do not fit our vision for the brand and these clubs are being put on the market for sale. All operators review their portfolios from time to time and this is overdue for Fitness First here in Australia."

333 Capital has been engaged to help find buyers for the 24 clubs which may be sold altogether or individually. The company said a condition of sale will be that all member and staff rights are preserved.

Clubs facing sale or closure are:

NSW

Kotara
Tuggerah
Five Dock
Epping
Tuggerah
Pennant Hills
Lane Cove
Wollongong
Norwest
Campbelltown

QUEENSLAND

Southport
Springwood
Mt Gravatt
Jindalee

SOUTH AUSTRALIA

Holden Hill
Hindmarsh
Marion

VICTORIA

Nunawading
Chadstone Platinum
Highpoint
Malvern East
North Quay
Essendon

WESTERN AUSTRALIA

Balga

Parties interested in acquiring the clubs should contact Chris Martin, Managing Director, 333 Capital on email: cmartin@333capital.com

For more information go to www.fitnessfirst.com.au/?skipintro=0.4932760876871909 

14th September 2011 - MEMBERSHIP, PROFITS FALL AT FITNESS FIRST

16th April 2011 - PETE MANUEL TO HEAD FITNESS FIRST AUSTRALIA 

4th November 2010 - FITNESS INDUSTRY PUTS CUSTOMER SAFETY FIRST 

5th October 2010 - ASSOCIATIONS JOINTLY ENDORSE NEW GUIDELINES FOR EXERCISE INTENSITY 

5th January 2010 - FITNESS TO BENEFIT AS AUSTRALIA TURNS TO SELF-IMPROVEMENT  

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